So in essence, its the US alliance with the UK that allowed Sabah to be incorporated into Malaysia, a British client state. So because of that, only Malaysia could be formed. Well I don't know, I just think that Malaysia would have been formed anyway without Sabah, because the British would have insisted on that.
Nevertheless, this is still a case of colonial powers drawing up the maps and dividing regions into neo-colonies for them to exploit later. This is a recipe for disputes and conflicts.
This is problematic. Because first, this arbitration was done by another colonial power, but also with little recognition around the world. Second, we must be aware that the Philippines too, just like Malaysia was put on the map by colonial powers. That means that the historical claim of the PH's on Sabah is just as weak as Malaysia's. If the PH can indeed claim Sabah due to its inheritance from the former Sulu Sultanate. Then this is gonna open a can of worms for the PH.
If the PH accepts this Arbitration in Paris that recognizes the PH's inheritance of Sulu Sultanate territory. Then due to this 'precedence' in the court of law, the PH must recognize Chinese inheritance over the Spratly Islands. Because modern China (PRC and ROC) have inherited the Spratly Islands from the Yuan, Ming, or Qing Dynasties. The earliest recorded claim of ownership was from the Yuan Dynasty.
The SCS is a minefield of disputes. Sometimes it is best to leave things as it is than to provoke another dispute.